1.The first priority for food security is to secure our best farmland. At present State Governments are allowing the expansion of coalmines and coal seam gas into prime farmland, alienating productive capacity forever and potentially destroying artesian water stores.

2. There is no policy giving primacy to food production from Australian sources by companies with that primary function. Only when Australian needs are met should the surplus be used for export or in food aid.

3. Foreign corporations are positioning themselves for commercial food security advantage, buying up prime Australian land sometimes within very large budgets outside any scrutiny as each purchase falls below the FIRB threshhold [eg Nexus with $500million]. Some foreign companies are doing this as part of their nation's food security and some are owned by foreign governments.

4. In the case of the Mary Valley, where the State Government has bought up a great deal of farmland which would have been drowned in the Traveston Dam, there is no plan for ensuring its food cropping and grazing productivity, an example of Government inertia on regional food security.

In the absence of a national food strategy, foreign corporations are treating Australia like a third world country and neither federal Labor nor the Coalition have developed policies to secure Australia's food security. Warren Truss has pinched some of my comments on food security but there is no plan.

In failing to act with urgency on the question of food security, State and Federal Governments and both of the major parties are betraying the country and our grandchildren.

The market could indeed work wonders for food security, if it had
been allowed to operate freely. This has never been the case.

Higher prices would indeed encourage more food production, but
global food prices were kept artifially low for decades, as
the EU and US dumped enormous subsidised foodstuffs around
the world. The net effect was less food production in those
parts, including Australia.

The cost of wheat has little to do with what you finally pay for
a loaf of bread. It might be 20-30c. The real cost is the food
chain from the farm gate to the consumer. But companies will use
any shift in global grain prices to cry wolf and increase prices,
often for their own bottom line benefit.

You can buy Australian garlic or Chinese garlic, the choice is yours.
Both are produced and sold. But if you want Australian garlic,
you'll have to open your wallet a bit further, to allow for the
higher cost of producing it, given that its labour intensive.

The real problem seems to be that many people want food to be
produced at below the cost of production, as it used to be.
Well sorry, oil, machinery, fertiliser, labour have all increased
in price. People won't produce more, if its not worth their while.

The problem as cast is that foreign governments might restrict Australia’s food imports. So firstly it is inaccurate to characterize the problem as “the market”. On its own terms, it’s “the government”.

We need first and foremost to understand that food nationalism is a beggar-thy-neighbour policy which cannot be sustained as a stand-alone solution. Not even the boldest interventionist is suggesting that government could or should have the prime responsibility to provide food, because they know very well that attempts in the 20th century to do so caused tens of millions of deaths by starvation. All food security policy depends on underlying functioning markets, which the interventionist hopes to manipulate, but not to abolish.

Food security policy is a species of the genus price controls. The idea is that the state will *cause* a food shortage outside its borders rather than let one happen within. However price controls in general have a history that is at best wasteful and at worst disastrous. They typically cause negative consequences worse than the original problem, which the interventionist mindset can then only think to counter with more of government’s meat-axe approach. Abolishing any prior interventions never seems to occur to them.

For example, governments are already causing enormous reductions in Australia’s food production in countless ways. Vast swathes of land are taken out of production and given over to the *notion* that comfortable middle-class marginal voters *might* bushwalk in it, oblivious to the fact that this causes people elsewhere to go without food! Through the Native Vegetation Acts, governments have in effect confiscated uncountable billions of dollars worth of productive farmland, and devoted it to – wait for it – forcing farmers to grow species *because* they are *descendants* of species *here before 1788* - that utterly urgent and important *aesthetic* value, more important than food to the starving!

Yet when faced with the anti-social chaos caused by government interventions, does it occur to the interventionists to call for government to stop doing what’s causing the problem in the first place?

(cont.)

No way! True to the interventionist mindset, they wrongly externalize the blame to the market, and call for yet more interventions, as the author has done.

Remember all the other nations of the world have their own plethora of these kinds of government interventions restricting food production for the sake of less important values. And this is precisely why government cannot have primary responsibility for the food supply in the first place – they can’t do it without causing planned chaos.

As usual, the intended exercise of power exceeds the purpose for which it was granted. For example if China restricts the sale of apples, that does *not* justify food security policy action in response, because lacking apples does not prevent people having “ sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life”.

Besides, just because the UN states the ideal and full value of food security, doesn’t mean that the most expedient means of achieving that is by policy – by governments, rather than by markets. And the author has not made the slightest attempt to justify his completely false assumption to that effect.

And if he’s going to urge us on the authority of the UN, why not urge the UN on the authority of us to stop states strangling each other with food restrictions?

It was precisely such protectionist policies in the 1930s that was the economic cause of WWII. Free trading nations don’t need to physically own resources, but protectionist nations do. For example, Germany can’t grow coffee. Under free trade, it doesn’t need to – it can just buy it. But protectionist states can’t do that, and that is why they push for territory that will enable them to control the physical resources necessary for the full gamut of production. Protectionism is the economic basis of fascism.

“If goods don’t cross borders, armies will.”
Bastiat

To what extent have the author or Seamus taken account of the unintended but logical *downside* of their proposed coercive manipulation of other people’s freedom, property and livelihoods?

www.mises.org

We export over 60% of the food we produce. Are you suggesting we stop these exports?

The best food security for Australia is to grow as much food as we can at a profit, and sell it for the best price possible. A hungry world is a dangerous world.

As the majority of the other posters point out, there is a lot wrong with the article and not all that much that is right.

The fact that 80 per cent of our diet comes from local farms, as opposed to 90 per cent 10 years ago is simply a reflection of the increasing diversity of diets and that many specialty products come from overseas.

However, it is straight nonsense to suggest that, somehow, Australia would run short of grain or beef, given how much we export. If apples become more expensive for a time because the Chinese have their problems, or bannanas vanish from supermarkets for a season because a hurricane has ripped through main banna growing areas, then so be it.

However, the author has performed on valuable service in making me aware that agricultural ministers now have "food security" somewhere in their title.. this is egregious nonsense which, hopefully, will not last.

"agricultural ministers now have "food security" somewhere in their title.. this is egregious nonsense which, hopefully, will not last."

Yes, Curmudgeon, yesterday my wife heard of the existence of the "Department of Broadband", which prompted her to cry "Department of Broadband! What next? A Department of Flat-Screen TVs?"

"The fact that 80 per cent of our diet comes from local farms, as opposed to 90 per cent 10 years ago............."

Does it? Dr Mark McGovern of Qld UofT claims that Australia exports only about 25% of its agriculture at second-stage production, not 80% as has so often been supposed.

L.B. Loveday - I was just quoting what was said in the article and I am prepared to be guided on this point, but I have looked at export and import stats for both processed and unprocessed foods.. which happened to be on my desk. In 09-10 we imported $23.23 billion worth of food, processed and unprocessed, and imported $10.7 billion.. that's proably a fair indication of what's happening than the 25 per cent of processed food figure.. (DFAT Composition pof TRade, Australia 2009-10).

Happened to see other stats while I was looking for the export figures and its clear that a lot of farm land in Australia is falling out of production. It would be the more marginal areas, but the trend has been going on for a decade now. I know some of it is reverting to forest.. That fact alone makes a mockery of the food security business,. difficult to see that there would be a problem..

This 60% keeps being put out I believe it is one product only grains.

We cannot just live on bread.

We are a net importer of all other food including fish.

"I was just quoting what was said in the article and I am prepared to be guided on this point"

C,

Me too - I have no personal knowledge and that's why I did not state it as a "fact" as you did (another stated "over 60%", again without citing the source); my article is from News Weekly, which I've come to trust.

They are trying to commission a research project, to be headed by Dr McGovern, into Aust food security. The article is at:

http://www.newsweekly.com.au/articles/2011may14_cover5.html

"That fact alone makes a mockery of the food security business".

I suggest Dr McGovern and others would disagree. Who is right? I've not done enough research to confidently form an opinion, and doubt I will.

*that Australia exports only about 25% of its agriculture at second-stage production*

Well yes, because most of it goes out as commodities, at first
stage. Boatloads of wheat, oats, barley, sugar, canola, etc.

*We are a net importer of all other food including fish.*

Nonsense. One of our biggest exports is meat.

Food security is an issue because Australia cannot feed double its population on its current diet in a drought year. How many will we be able to feed in a drought year when oil is largely unavailable in Australia in 20 years time and phosphate rock production is well in decline? This is why we need to consider population size and urban planning (to provide for urban agriculture) as part of food security:

http://www.energybulletin.net/node/52706

"Happened to see other stats while I was looking for the export figures and its clear that a lot of farm land in Australia is falling out of production. "-curmudgeon

Do you have a source for these stats Mark? I would be very interested to see them.

Well sorry, oil, machinery, fertiliser, labour have all increased
in price. People won't produce more, if its not worth their while.
Posted by Yabby, Friday, 20 May 2011 10:15:43 AM

Exactly Yabby, in addition to many other costs, drench, stock feed (farm produced or substitutes during drought), contending with bushfire losses (can wipe out the whole line of breeding)when a hobby farmer or small acre neighbour decides to take risks starting a bushfire welding or working in his shed during a 40 degree heatwave with hot winds fanning the flames, and/or the government advertises farming assistance $$ yet over the years never forthcoming.

Whingeing farmers with high incomes? No,I know not!

Dairy - the industry was de-regulated and lost most hard working dairy farmers/families, hence the high prices for dairy products over the past 10 years. Why should Australians complain? Few supported the Dairy Farmers, two families on my side lost their incomes down in VIC.

Food Imports - fruit and veg - well, given that Australian crop fruit and vegie growers in QLD had their crops and orchards wiped out, it now appears that some of those imports we contested strongly now come in handy to be honest. Disease risk or no disease risk.

Exports - we have not been exporting much over the years anyway given our history not supporting farmers and graziers.

Therefore, Michael, the answer to this query is "Yes, we are able to provide food security, IF both people and the Government support and assist the few professional Farmers and Graziers Australia has remaining, to meet everyone's daily food intakes.

weareunique gives a good example of the economic illiteracy underlying support for food security policies - the idea that government regulation of a market makes things cheaper for consumers, at the same time as increasing the incomes of producers.

"Dairy - the industry was de-regulated and lost most hard working dairy farmers/families, hence the high prices for dairy products over the past 10 years."

WAU, in case you haven't noticed, a litre of milk now costs less than a litre of water.

According to WAU's theory, consumers are a kind of milking cow that government should force to pay over the market price for the benefit of producers.

People who think that we can make products cheaper by having government take over the control of them, are literally so ignorant, so lost in a fantasy-land of statist magic pudding, that they hardly qualify to have an opinion on the matter

Bugsy - the stat on farmland falling out of production it was in an ABS release. Don't have it in front of me now but just look on their site. Otherwise I'll cite the series number ect when I get back to my desk on Monday. There has also been some publicity on it of late.. For that matter its an international trend. Also happening in the US. Not sure about Europe but agriculture there is so heavily subsidised the trends could well be disguised.

Lovejay - tough if people disagree. If you or Michael in Adelaide or wereunique with his own strange views on costs want to take the matter further, rather than have these bizarre discussions on amounts of food that is exported, then look at the quarterly review produced by ABARES. It some where in..
http://www.abares.gov.au/
Its the best I've seen, with breakdowns of stats and market reviews for each commodity. To suggest that Australia only exports grains, as one poster did, is absurd.
Somewhere in there is also graphs of agricultural productivity, which has flattened out in the past couple of decades or so. Is that a cause for concern in future decades? Doubt it, but there has been some discussion on the issue you may care to follow.

For the moment with farmland falling out of production and exports far in excess of imports, I just cannot see that we will be faced with any particular problem. After all, look at what happened in Europe when they subsidised certain commodities. Couldn't move for the stuff, and certainly couldn't sell it.

WAU, in case you haven't noticed, a litre of milk now costs less than a litre of water.

According to WAU's theory, consumers are a kind of milking cow that government should force to pay over the market price for the benefit of producers.

People who think that we can make products cheaper by having government take over the control of them, are literally so ignorant, so lost in a fantasy-land of statist magic pudding, that they hardly qualify to have an opinion on the matter
Posted by Peter Hume, Saturday, 21 May 2011 12:43:42 PM

One should bother with your viewpoints that no government policies should be in place to look over children under the age of 18 years?

That is the type of democratic? law abiding society you have wished upon Australian children and their families since the commencement of your postings Peter, therefore why would I bother sparring with you regarding your anti-government rants?

Ever milked cows 7 days per week in ice, sleet and rain during -3 temps Peter doing all the prep work prior to milking? Disinfecting the dairy sheds afterwards? Never having a break or holiday for 30 years?

Dairy Farmers and Producers for generations received jack$#@! - a roof over their heads (for the average dairy farmers in VIC over 40 years, a weatherboard, fibro or small brick home and lucky to have a meal daily) as a result of their past meagre incomes.

Its not the primary producers who receive the profits Peter, it is the 'middle man - greedy companies' and if you had read my post thoroughly, would have noticed that I had a go at the Government de-regulating the VIC industry which led to the higher prices for most dairy items.

La La Land?

Try getting your hands dirty in some real dirt Peter

According to WAU's theory, consumers are a kind of milking cow that government should force to pay over the market price for the benefit of producers.

Q: Who feeds you Peter?

A: I have as a former "dairy worker" and "Primary Producer" for 25 years!

Guess what?

Not any more, I worked in another field while exiting the country work!

People with your viewpoints can start growing their own vegies, run livestock and start milking cows in -3 degree temps!!

Most producers are fed up with the fact that consumers never bothered supporting them during their hours of need/changes years ago, brought about by government and greedy companies.

WAU

You are only entitled to what people are willing to pay you for your product. If you want more than that, and the consumers don't want to pay it, I don't think you have a right to urge government to set up an arrangement the effect of which is to force consumers to pay more just so that you can have a better life. The purpose of production is consumption, not the other way around. By the way, I am a farmer, and make my living from selling products at the market price.

"People with your viewpoints can start growing their own vegies, run livestock and start milking cows in -3 degree temps!!"

Well that's right, isn't it? And if people don't want to do that, they can pay more for their food, can't they, and that is as it should be. But that's not an argument in favour of government regulation to favour producers at the expense of consumers.

"Most producers are fed up with the fact that consumers never bothered supporting them during their hours of need/changes years ago, brought about by government and greedy companies."

Well you know what? Consumers aren't there to make things comfortable for producers. If the producers can't offer them a product at a price the consumers are willing to pay, that is and should be the end of the matter.

And if it's true that "greedy companies" can charge what they want, then why didn't you do that? What makes you think they are any less subject to the market discipline of profit and loss than you are?

Best of luck with your outlook and farming business Peter, your views above certainly do not reflect mine.

Your above views are not what were reflected in mine.

For the record, I took my statistics on Australia's food production, consumption, imports and exports from the commonwealth Department of Agriculture, Food and Forestry's Australian Food Statistics (http://www.daff.gov.au/agriculture-food/food/publications/afs/) published annually since 2000. They in turn source their national-level food balance sheet statistics from the UN Food and Agriculture Organisation (http://faostat.fao.org/). These statistics show Australia exporting consistently around 60% by weight of food produced, summed across 12 major groups of commodities: Cereals, Starchy roots, Sweeteners, Pulses, Vegetables, Fruit, Meat, Eggs, Fish & Seafood, Dairy, Vegetable Oils, Animal fats. There are big differences amongst these commodities. We export 60-70% of wheat production but only 10-20% of fruit and vegies. We have large surpluses of production over consumption for meat, sugar, dairy, cereals and pulses, but produce less than we consume of seafood and vegetable oils. In the most recent report covering 2005-7 for the first time it is reported that we consume more vegetables than we produce - due to steady production and rising demand.

So the national statistics show a fairly robust food situation, as reported in summary by ABARES last Wednesday (http://www.abares.gov.au/publications_remote_content/recent-20?sq_content_src=%2BdXJsPWh0dHAlM0ElMkYlMkYxNDMuMTg4LjE3LjIwJTJGYW5yZGwlMkZEQUZGU2VydmljZSUyRmRpc3BsYXkucGhwJTNGZmlkJTNEcGVfYWJhcmVzOTkwMTA1MzhfMTFhLnhtbCZhbGw9MQ%3D%3D).

Nevertheless I plead guilty as charged to the offence of believing that governments should make policy about many things, including the food system, and I think there are ways to intervene that do not amount to blunt price control. Also important to remember that "free markets" are not apolitical, or devoid of power relations. It is those with greater market power - large food traders, processors and retailers - who have more influence on outcomes. Consumers have power too of course - but only in proportion to their wealth. In assessing "food security" I'm interested in outcomes at the household level as well as at the national level, and at the household level things look less robust - but that's another story.

Peter Hume. You asked WAU "And if it's true that "greedy companies" can charge what they want, then why didn't you do that?"

It doesn't work that way Peter. There was a time when milk was highly unregulated in that any tin-pot 'farmer' could run a few cows, milk them in unsanitary conditions, put the milk into vats and leave them in the sun for a local dairy company collector to pick up and deliver to the community. People got sick, many of them children for reasons I won't go into here.

Then came more regulation, pasteurisation, etc and many small dairy companies/distributors went out of business. Unfortunately, many of those small companies (who employed locals) were bought up by increasingly bigger companies including Internationals.

Today we have all milk supply controlled by a few multi-Nationals and they dictate the price the farmer gets for his milk. If the farmer baulks at the stingy price per litre, too bad. The multi-National simply by-passes his property until the farmer toes the line or folds up. This scenario is being played out every day while Coles and Woolworths reduce the price of their plain label milk to $1 a litre. How long do you really think we'll be paying a dollar a litre for milk? What happens when the local farmers toss in the towel and all our milk is imported? $3 a litre? $4 a litre?

Cont.....

Same with the potato industry. Giant multi-National companies control potato production exactly the same way. McCains have slowly stripped potato farmers of a workable income to the point where they have no income buffer zone to cover a bad year. If they can't deliver to McCains, then McCains will go crying to the Government so they can import tons of potatoes, thereby squeezing the remaining spud cockies out of business while we're left to eat over-priced imported produce. Indeed, there have been suggestion that this strategy is a carefully manipulated plan by said multi-National to flood the Australian market with their own produce thereby greatly increasing the capital for shareholders.

There's not a win in sight for Aussie farmers and the average Jo Blow doesn't have the gumption of foresight to see that the above scenarios are actually doing great harm to consumers by way of lower standards and higher prices.

With all due respect Peter, you really need to do some homework on this very issue.

Just a small note of correction on the dairy industry. While there are several large multinationals in the industry Australia's largest milk processor is still a farmer-owned cooperative. Murray Goulburn Cooperative Limited processes over 30% of Australia's milk (sold through the Devondale retail brand, as processed dairy rather than liquid milk).

But I agree that concentration of power in a small number of very large companies is not a recipe for a resilient food system.

Thanks Michael. I wasn't too sure just where Murray Goulburn stood in all of this. Glad to hear they're still the largest. Thank you for the correction.

Everyone likes it if the prices of the things he wants to buy are lower and the things he wants to sell are higher.

If competition in business reduces the price of goods to the consumer, what's wrong with that? That's as it should be. You have always got the option of paying more than the asking price for potatoes, or buying them cheap and then sending money out to potato farmers. But you don't, do you?

The reason bigger businesses tend to predominate in markets is because their economies of scale mean they can offer goods cheaper per unit. It's why we prefer to shop at supermarkets than at corner stores like we used to. We've got better things to do with the money than pay inefficient businesses to run inefficiently. There's nothing evil or unfair about it. If we wanted to, we could pay more and preserve relatively inefficient businesses. We don't want to.

So far as the businesses get an advantage by lobbying government to rig things in their favour, that's bad and I'm against it.

But that's not an argument in favour of lobbying government to rig things in the favour of inefficient producers.

The McCain's and multinationals of the world are no freer to set prices than the farmers because they also are subject to the consumer's absolute sovereignty in deciding whether to buy and how much to pay. No-one's got a gun at his head forcing him to buy McCain's potato chips, so your argument doesn't hold water. The fact that multinationals may predominate is an effect of consumer choice, not a cause. They are big because so many people have *chosen* their service over the competition, because the consumers judge their own satisfaction to be better served by the ones they choose, obviously.

If a business reduces the price of goods with the idea of driving smaller businesses out, it has to keep its prices down for this to work, otherwise competition will fill the void. There is no evidence of any such strategy at work in reality.

Just ponder if China called in all money loaned and stopped exporting and then concentrated on its own internal environmental and other problems.

It then only exported goods to pay for those imported to meet its own needs.

As a dictatorship it could do it as as was done by Eisenhower stopping production of cars in WWII.

Where is our food security then.

Peter I agree with you that consumers wield significant power in the market, and thus I think consumer choices will play a critical role in the future evolution of our food system.

But I think it is naive and misleading to talk down the market power of very large semi-monopoly businesses. The processes of competition you describe work fine in a marketplace where many sellers of relatively equal size compete for customers. Our food processing and retail sector is not like that. The ACCC found in 2008 (http://www.accc.gov.au/content/index.phtml/itemId/838251) that Coles and Woolworths between them control 70% of the retail market in packaged groceries and 50% in fresh produce. The size of these businesses means they can easily afford to sell "loss-leaders" - goods sold below cost price as part of a wider marketing strategy. If they use loss-leaders to out-compete smaller businesses that can't afford to carry the losses then that is predatory pricing - not fair competition. Once you've starved out the competition there's nothing to stop you jacking up prices again.

The Senate Economics References Committee (http://www.aph.gov.au/Senate/committee/economics_ctte/dairy_industry_supermarket_2011/interim_report/index.htm) held an inquiry recently into allegations of predatory pricing by supermarkets in the fresh milk market and concluded that "a broader review of national competition policy is currently warranted."

how about we globalise the cost side of the farm sector in, line with the globalised income of the food producing sector.

that would mean much lower costs for the food producer, hence much more food produced at a lower price.

if you want to argue that Australian workers ( remember farmer's are workers to) deserve higher then world market wages, surly that is a cost against the govt , not a cost against the food producing sector on world market wages

Quote from yabbie (page one);

“The cost of wheat has little to do with what you finally pay for
a loaf of bread. It might be 20-30c. The real cost is the food
chain from the farm gate to the consumer. But companies will use
any shift in global grain prices to cry wolf and increase prices,
often for their own bottom line benefit.”

This is actually the problem, the increasing in-efficiency between the farm gate and retail.
The increasing also reflects against the cost structure for the wheat grower, so while the farm gate does not change much, the cost keep climbing as urban areas reduce efficiency by demanding a great share of the wealth through regulations.

Answer is simple, regulate the same trading conditions for both wheat growers income as his costs.
The difference between world market price and domestic price, is actually a subsidy to the urban sector of the economy.

In the so called country of fair go, how can we have a group on world market income’s being regulated to subsidize those on domestic incomes